By: Barbara Zigah
The recent news from Japan that Yukio Hatoyama, the Prime Minister, would soon resign sent the Yen falling broadly in Asian trading today. As reported at 12:30 p.m. (JST) in Tokyo, the Japanese Yen fell to 91.78 Yen on the EBS trading platform, the lowest level since mid-May; just prior to the announcement, the Yen had been trading against the greenback at around 91.10 Yen. Markets are speculating that Hatoyama’s replacement could be Naoto Kan, who is serving as the country’s deputy prime minister. According to forex analysts, Kan favors a weaker Yen, thus the markets will move cautiously until a replacement is named.
The Euro also continues to be under heavy pressure, and appears more vulnerable to potential sell-offs, especially given escalating concerns over the apparent widening of Europe’s debt crisis and the affect on the European banking system. Some traders noted that the selling pressure on the Euro will continue as market players are beginning to acknowledge that not only is the health of the American economy improving but the U.S. banking system looks to be in a better position than its counterparts in Europe. Against the Japanese Yen, the Euro traded up at 112.33 Yen, an increase of 1%. Versus the U.S. Dollar, the Euro traded at $1.2254, an increase of .2%; yesterday and helped in some measure by the Euro’s gains on the Japanese currency. Yesterday, the Euro traded at $1.2110 on the EBS platform, a new 4-year low.